I'll say right up front that I am not an unbiased observer of this particular effort by OECD to tabulate support measures to fossil fuels. I've collaborated with Ron Steenblik, one of the project supervisors, for decades at this point; and with project manager Jehan Sauvage since his early days of deciding to enter the bizzarre-but-fascinating world of energy subsidies. I also contributed directly to the 2013 version of the Inventory.
In 2013, the U.S. federal and state governments gave away $21.6 billion in subsidies for oil, gas, and coal exploration and production.
From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period.
New Earth Track analysis shines a light on fossil fuel subsidies through tax-exempt master limited partnerships (MLPs)
If a company or an industry is going to get subsidized, there are good ways and there are better ways for it to happen if one is sitting in the corporate suite. Among the best is to receive big subsidies that, while not flowing to your competitors, arrive in a form that nobody seems to notice. The benefits of this structure are clear: while the recipient gets a large slug of financial support, because few people see or understand the largesse, the political cost to both obtain and retain the subsidy is relatively low. Master Limited Partnerships, the subject of Earth Track's most recent
Although data on fossil fuel subsidies around the world have been growing, most of this information focuses on national level policies. The thousands of subsidies at the state, provincial or local levels are largely untracked -- with little visibility either in the United States or in most other countries of the world.
Earth Track is pleased to release A Review of Fossil Fuel Subsidies in Colorado, Kentucky, Louisiana, Oklahoma, and Wyoming. The report documents hundreds of subsidies to established fossil fuel industries and fossil fuel consumers in five U.S. states. Many of these policies have contributed to environmental damage, energy market distortions, and fiscal shortfalls.
For the first time ever, the OECD has compiled an inventory of over 250 measures that support fossil-fuel production or use in 24 industrialised countries, which together account for 95% of energy supply in OECD countries. Those measures had an overall value of about USD 45-75 billion a year between 2005 and 2010. In absolute terms, nearly half of this amount benefitted petroleum products (i.e.
There was very promising motion on subsidy reform contained in this March 2011 letter to Congress signed by a large number of conservative organizations (as well as others). Since structural reform of subsidies will require a broad political coalition, the variety of groups signing on to this letter is a positive step. Elements of their letter that I found particularly important are:
Not a document for the faint-of-heart, but one of the best resources for learning about the vast array of federal tax provisions that are now doling out more than a trillion dollars of special exemptions for various groups in the economy. A good book to tuck under your arm when you head out to the beach...